Carnarvon Petroleum Limited gave an update Thursday on the work being performed in assessing the results from the Phoenix South-1 well in permit WA-435-P in the North West Shelf of Western Australia, and to provide some guidance on the likely timing of the drilling of the Roc well.

Apache on behalf of the Joint Venture (JX Nippon, Carnarvon and Finder Exploration) is undertaking a technically complex and thorough process of assessing the well results. To provide a sense for this, an outline of some of the work being undertaken has been included as an annexure to this update.

At a Joint Venture meeting on Tuesday Dec. 9, Carnarvon was provided with a detailed update by Apache (the operator) of progress on their technical evaluation. Because this is such a unique discovery in terms of the type of oil discovered and the nature of the reservoir rocks, together with key data not yet being available from the laboratories, the data set is incomplete and it is not possible for Carnarvon to provide specific information about the size of the discovery at this time. Our concern is that such incomplete information has the potential to be misleading to investors without a significant amount of additional analyses and evaluation.

CEO Adrian Cook said, “I promised shareholders at our AGM that I would provide them with an update on the progress of the work on the Phoenix South-1 well and I can report that a great deal of work is being done right now and that the results to date are encouraging.

The discovery of oil at Phoenix South has caused the Joint Venture to re-evaluate everything it previously assumed about this basin and that has added extra time and complexity to the work schedule. Further there are no obvious analogous oil plays to provide guidance on how to evaluate this basin. Consequently, Apache require more time to receive, consider and integrate all of the data before Carnarvon is able to provide oil in place estimates, recoverability factors and recoverable volumes. I expect we will be in a better position to provide a more comprehensive update sometime toward the end of the first quarter of 2015.

I can confirm is that the oil sampled from the Phoenix South-1 well is exceptionally good quality light black oil (not condensate) with a high API gravity around 47 degree and highly favorable mobilities.

I can also report is that the Joint Venture has confirmed that the Roc Well (for which Carnarvon is fully funded) is expected to be drilled in the middle of 2015. The Roc well is considered to be one of the more prospective and commercially attractive wells to be identified so far within the Phoenix blocks.”

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